Business & Practice

Feds Could Change OT Pay Rules for Attorneys

Sept. 8, 2015, 7:17 PM

Dozens of contract attorneys voiced concerns about the health of their profession in letters and comments sent to the U.S. Department of Labor during the past two months as the federal agency weighs a change to overtime pay rules.

The DOL is considering its first revisions since 2004 to the Fair Labor Standards Act section 13(a)(1) , which, as currently written, creates an overtime exemption for licensed attorneys, as well as other professionals. A comment period closed on Friday. Specifically, the DOL is contemplating whether to change which primary job duties trigger an exemption and whether to increase the standard salary threshold that triggers an exemption, currently set at $455 per week. It is also considering whether to create a mechanism to automatically increase this amount over time.

Taken together, the letters paint a picture of the contract attorneys, who review documents as part of the discovery phase of litigation, as a struggling group whose wages have fallen in recent years, particularly after the recession as the market for legal services has slumped.

A large percentage of the contract attorneys urged the DOL to adopt standards that would enable them to receive overtime pay more often, but a contingent of the letter-writers opposed that argument, citing concerns that such rules would actually result in lower overall compensation because employers would reduce regular wages or other concerns.

“The presumption that all attorneys make a ‘professional’ salary is outdated because there are at least 14,000 document review attorneys like myself working in this ‘temporary’ industry nationwide but especially in NY City and Washington, DC with unstable employment opportunities,” Ellen Kuo wrote in one comment. “A missed hour or day of work means no pay.”

Many of the letters followed a template provided by the United Contract Attorneys, a group that is seeking to organize for better benefits and compensation.The UCA also submitted a comment that stated the group launched in 2012 and has around 200 members on its listserv, who it described as “a stark example of the disappearing middle class.”

They estimated that contract attorneys make on average $50,000 on an annual basis, which works out to $961.54 per week — about $25 an hour, although rates typically range from $19 to $35, according to the UCA comments. It commended some firms for paying high compensation, specifically naming Sullivan & Cromwell, but noted other firms have charged a high mark-up on the hourly rates it pays out to document review attorneys.

Because most attorneys carry debt from law school, and possibly college, they wrote that their income levels actually need to be higher. They said the DOL’s professional exemption dates to 1940 and no longer makes sense: “the legal industry has changed enormously with the advent of technology and law firms’ reliance on agencies” that employ tens of thousands of attorneys to review documents.

Although many experts say most of eDiscovery is still conducted through human review, as opposed to technology-based solutions, the actual size of the market remains somewhat murky since most companies do not disclose this data and is rarely disclosed in most court cases. In 2012, the RAND Institute for Civil Justice estimated that document review by contract attorneys can create more than 70 percent of the costs of discovery.

The issue of overtime pay for contract attorneys has been receiving increased attention this summer: In July, the Second U.S. Circuit Court of Appeals reversed a lower court decision and ruled that a document review attorney seeking overtime pay could proceed with his lawsuit against Skadden Arps Slate Meagher & Flom and Tower Legal Solutions. Attorneys for the plaintiff in that case had put forward a legal theory that his document review work was so repetitive and trivial that it did not qualify as legal work.

Some attorneys who submitted comments disputed that idea, and argued it would ultimately undermine contract attorneys in their efforts to receive better compensation.

“I spent too much money on my law degree, and too much time studying to pass the bar, for anyone to now say that what I have done for a decade isn’t legal work,” wrote Bethany LaFave. “Was a lot of the work routine? Yes. But a lot of work that almost everyone does is routine, including attorneys employed as associates at the big law firms I did do review for.”

LaFave said she would oppose overtime pay if it means that document review does not count as legal work.

Vic Simon, who described himself as an attorney living in Tacoma Park, Maryland, said he opposed “being entitled to mandatory overtime pay” for a number of reasons including his assessment that it would likely decrease the number and length of projects and that working overtime is nearly always voluntary in his experience. He specifically cited opposition to the UCA.

Still, many attorneys said they carry heavy debt from law school and never expected it would be so difficult to find higher compensated employment.

Brian McCarty noted that many of the comments had been submitted anonymously. “That’s because most lawyers are losing at, or just winning enough to keep playing, the student loan debt slot machine,” he wrote.

The comments are posted online here .

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